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Lack of low-emission, low-cost oil

and gas puts energy transition at risk:

WoodMac

GLOBAL THE energy transition will require oil and basins, and exploration on this scale over the
gas for several decades, Wood Mackenzie has next two decades will add oil and gas supply of
Most remaining said in a report, but the supply of low-cost and around 10-15mn barrels of oil equivalent per day
resources are too high low-carbon "advantaged" resources is limited. (boepd) by 2050.
cost and too high The analysis shows that the total discovered Decarbonisation technologies and biofuels
emission-producing. and prospective oil and gas resources are more could play an even bigger role in meeting the
than double the projected demand for 2050. demand for low-carbon energy sources. Bio-
However, truly advantaged resources, with low based diesel and aviation fuels produced from
breakeven and emissions, are scarce. The global plant-based feedstock could emit up to 80% less
energy industry will have to face the challenge of carbon than crude oil-based products.
managing the demand for energy and reducing Despite these potential solutions, Wood
its carbon footprint. Mackenzie highlights the fact that advantaged
According to Wood Mackenzie, most devel- resources alone will find it difficult to meet all
oped fields have little to offer, and only 28% of ETO (Energy Transition Outlook) oil and gas
the resources in commercial undeveloped demand. Some companies may decide to double
fields, roughly 49bn barrels of oil equivalent, down on their current strategies, hoping for less
are advantaged in terms of breakeven below $30 competition in the sector. However, many com-
per barrel with emissions intensity of less than panies may begin or accelerate their exit from
20 kg of CO2 equivalent per boe. Wood Mac- the sector to pursue low-carbon energies and
kenzie’s data reveals that only enough advan- renewables. If this is the case, the security of sup-
taged resources are available to meet about half ply may become threatened, and unfortunately,
of the base-case oil and gas demand forecast to companies may resort to using disadvantaged
2050. resources to meet demand.
Even under the most ambitious targets of In conclusion, the energy industry will have
the Paris Agreement some disadvantaged sup- to find ways to manage the demand for energy
ply will be necessary, meaning that companies and reduce its carbon footprint. The transition
will have to pivot to new strategies to meet the to low-carbon energies will require a mix of
demand for oil and gas. Exploration could play solutions, including exploration, decarbonisa-
a vital role in locating and increasing this sup- tion technologies and biofuels. While there are
ply, as Wood Mackenzie found that high-impact significant challenges ahead, the industry has
exploration could contribute around 5-10bn the potential to meet the demand for energy and
boe of new advantaged barrels per year. This achieve the most ambitious targets of the Paris
new supply will be found within energy super Agreement. ™

P18 www. NEWSBASE .com Week 09 03•March•2023